Bermuda should not rely on the end of the US recession to halt years of decline in its tourism industry, the chairman of a key tourism review team said on Tuesday.

Banker Mr. James Masters, who is heading the Tourism Planning Team for the Commission on Competitiveness, said answers for improvement to the Island's most important industry lay at home and not overseas.

"I would emphasise the importance of local product issues in contrast to the external marketing factors such as sales and advertising .. .'' he told Hamilton Rotarians at The Princess Hotel.

"We might take the position that all these problems will go away when the United States pulls out of its current recession.

"However, I think that the people on the front line, who serve our visitors, know that our problems are also here in Bermuda and that we must address the local product problems if we are going to return our industry to its former prosperity.'' Mr. Masters, who is heading the most widespread tourism industry review since the 1950s, painted a stark picture of an industry in decline -- a picture he characterised as a "20 percent problem'': foreign exchange receipts from tourism have declined 20 percent over the past four years; Government tourism revenues of $118 million have been flat over the past four years. Given inflation in that time, it amounts to a real decline of 20 percent; Air visitor numbers have dropped by 21 percent to 386,000 in 1991 from 490,000 in 1980; More than 800 jobs -- about 20 percent of the total tourism work force -- were lost during the 1980s; Before the Elbow Beach expansion began last autumn, only $3 million had been invested in hotel construction in the previous four years. The figure represented just one percent of the total construction in Bermuda during that time.

Mr. Masters also noted other worrying signs of decline.

Local studies showed that a hotel career carried the lowest degree of recommendation.

In a reflection of that fact, Mr. Masters said the number of hotel students at Bermuda College was in decline, now accounting for only 15 percent of current enrolment.

He also cited the growing incidence of public officials talking repeatedly of international business being "the business of the future''. Such comments, he said, were to the detriment of the tourism industry.

Mr. Masters said the most important indicator of decline was the increasing number of visitors who said their vacation was too expensive and that our quality had slipped.

The thrust of their comments was that Bermuda "no longer offered value for money''.

Mr. Masters' grim portrait was made a few days after a Royal Gazette headline reported "International business to overtake tourism trade''.

But the banker used the speech to remind his audience of the fundamental importance of tourism to the local economy.

In 1991, it contributed $456 million of the Island's $1 billion in total receipts. It supplied the government with $118 million or 34 percent of its total revenues and it employed 4,600 people or 13 percent of all people in Bermuda.

"The number of people indirectly employed by tourism is over half the jobs in the country,'' he said.

Mr. Masters said any national solution to tourism industry woes required the country going through four phases.

"First, we must recognise there is a problem,'' he said. "We must get through the denial phase where those in positions of responsibility will not accept the need for change and assume that Bermuda will be bailed out yet again by the end of the US recession ...'' Mr. Masters said the Island needed to follow it with the creation of a positive environment where ideas could be brought forward to improve the industry.

Consensus and then implementation must follow.

Mr. Masters said the appointment of the Commission on Competitiveness amounted to official recognition that a problem existed.

And his tourism planning team had created 18 "task forces'' to bring forward ideas for change.

To elicit more ideas and participation, the Commission had set up a telephone hotline. Public hearings would be held early in the new year.

Mr. Masters said implementation would be the most difficult part of recovery because of the Island's limited resources.

"We will be encouraging a wide variety of groups to be involved in the execution of the plan so that no one group will be overburdened by demands for resources,'' he said.

Mr. Masters also said his team would focus on tourism industry leadership. All leaders, he said, should consider their effectiveness.

"I would suggest that only through improved leadership in the industry will we be able to bring together the various interests in the community and achieve a turnaround in tourism's declining fortunes.'' Mr. Masters said he hoped his team would put forward its strategic plan for the industry in June. It would contain specific recommendations of the leadership and management of the tourism product.

Mr. James Masters.